WASHINGTON/LONDON: Wall Street stocks rose and global share markets edged higher on Thursday on supportive U.S. jobless claims data as investors reassessed Federal Reserve statements on inflation and looked to upcoming data for direction.
The U.S. dollar weakened, while sterling fell after the Bank of England kept its stimulus program unchanged and left its benchmark interest rate at an all-time low.
The S&P 500 and the Nasdaq opened at all-time highs, boosted by shares of Tesla and other top-shelf technology firms as data showing fewer weekly jobless claims pointed to a steady recovery in the U.S. labor market.
The Dow Jones Industrial Average rose 246.39 points, or 0.73per cent, to 34,120.63, the S&P 500 gained 23.46 points, or 0.55per cent, to 4,265.3 and the Nasdaq Composite added 124.27 points, or 0.87per cent, to 14,396.00 shortly before noon EDT (1700 GMT).
"Jobless claims numbers came in a little high but looking week to week they’re still moving in the right direction," said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.
The data is "another proof point that the economy is coming back to life, albeit maybe in a slightly bumpier fashion than some anticipated at this stage," he said.
The MSCI world equity index was up .1per cent, edging toward record highs hit earlier in June.
In Europe, the STOXX 600 gained 0.84per cent, bolstered by news of German business morale hitting its highest in 2-1/2 years.
Britain's FTSE 100 share index was up 0.5per cent after the Bank of England kept the size of its stimulus program unchanged and left its benchmark interest rate at an all-time low of 0.1per cent, as expected.
In Asia, markets made smaller gains. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3per cent, recovering from a one-month trough touched earlier this week, while Japan's Nikkei was unchanged.
Stock markets have whipsawed over the last week, feeling the after-effects of a surprise projection for Federal Reserve rate increases as soon as 2023, which knocked stocks, boosted the dollar and led to the flattening of the U.S. bond yield curve.
Investors are now pricing the first full U.S. interest rate rise for February 2023, compared with December 2022 previously.
Ten-year U.S. Treasury yields eased 1.4885per cent, continuing to hover below 1.5per cent, while government bond yields in the euro zone drifted lower, reversing earlier gains.
"Until bond yields break out in a sustainable fashion, in either direction, it remains very hard to determine which direction stocks are headed in over the near term," JPMorgan analysts wrote in a note. "Much continues to hinge on the upcoming growth data."
Germany's Ifo institute said its business climate index rose to 101.8 from 99.2 in May. A Reuters poll of analysts had pointed to a June reading of 100.6.
It followed the release on Wednesday of strong European manufacturing data. ISM manufacturing and U.S. non-farm payrolls data are due next week.
The U.S. dollar edged up against a basket of six other currencies but remained well below last week's two-month high as traders navigated conflicting signals from Fed officials on the timing of a withdrawal of monetary stimulus.
On Wednesday, two Fed officials said a period of high inflation in the United States could last longer than anticipated, just a day after Fed Chair Jerome Powell played down rising price pressures.
The euro was up 0.04per cent against the dollar. Against the Japanese yen, the dollar eased but held near a 15-month high of 111.11 touched earlier in the session.
The BoE's decision on Thursday was largely anticipated by economists polled by Reuters who expect the central bank will wait to see if a post-lockdown jump in inflation proves transitory and whether unemployment rises when the government scales back its job-protection scheme.
The British pound shed 0.4per cent against the dollar.
Oil prices were up, hovering near the previous session's three-year highs set amid drawdowns in U.S. inventories and accelerating German economic activity.
U.S. crude rose 0.37per cent to US$73.35 per barrel and Brent was at US$75.49, up 0.4per cent on the day.
Spot gold added 0.1per cent to US$1,780.01 an ounce. U.S. gold futures gained 0.08per cent to US$1,783.80 an ounce.
(Reporting by Chris Prentice; Editing by Dan Grebler)